A Whistleblower is a person who is paid by the IRS Whistleblower Office in result of blowing the whistle on individuals who have failed to pay the tax that they owe. If the IRS uses information given by the whistleblower, they can be rewarded up to 30% of the additional tax. The primary purpose of the Whistleblower Award is to encourage people with the knowledge of significant tax disobedience to come forward and provide information to the IRS. The IRS vision of the Whistleblower Informant Award includes broadening the program’s reach and providing better communication with existing and potential whistleblowers.
A Whistleblower is a person who is paid by the IRS Whistleblower Office in result of blowing the whistle on individuals who have failed to pay the tax that they owe. If the IRS uses information given by the whistleblower, they can be rewarded up to 30% of the additional tax. The primary purpose of the Whistleblower Award is to encourage people with the knowledge of significant tax disobedience to come forward and provide information to the IRS. The IRS vision of the Whistleblower Informant Award includes broadening the program’s reach and providing better communication with existing and potential whistleblowers.The IRS looks for credible and reliable information from whistleblowers. The IRS will not allow a “educated guess” or unsupported suspicion. The Whistleblower Program isn’t for personal disputes or problems within a relationship. This program is made for those individuals who have evaded paying taxes while others have paid thousands of dollars each year. This program is made to balance the field of taxation and allows the people to play the part of the IRS. If the information results in the collection of taxes, penalties, interest, or other amounts of the noncompliant taxpayer, an award will be given to the whistleblower.
The rules of receiving a reward for blowing the whistle on non taxpayers varies in two different ways.If the taxes, penalties, interests, and other amounts exceed $2 million then the IRS will pay 15 to 30% of the amount collected. If the case includes a specific individual, their gross income must meet $200,000 or more. If the whistleblower disagrees with the outcome of the case, they may appeal to the Tax Court. Further information is found at the Internal Revenue Code IRS Section 7623(b), Whistleblower Rules.
Another situation the whistleblower may be awarded from is if the dollar threshold of $2 million is not met. The maximum award is 15%. The informant may not dispute the outcome of the claim in Tax Court. Rules explaining these type of cases are found at Internal Revenue Code IRC Section 7623(a) – Informant Claims program.
If one was to decide to submit information and seek an award for doing so, they must use the IRS Form 211. Using this form applies for both award outcomes.
Confidentiality of a whistleblower is hard to come by. To the best of their ability, the IRS will protect the identity of the whistleblower to the fullest extent permitted. Unfortunately, the whistleblower may be an essential witness in some circumstances. Therefore, their identity will be uncovered to help provide crucial evidence in the investigation.
Payments are not made until after the taxpayer has exhausted all appeal rights and the legal period for the filing of a claim for refund has expired, or been waived by the taxpayer. Therefore, the whistleblower would not receive a payment until five to seven years after the claim has been filed.
At Lothamer Tax Resolution, we cater to those people who had the whistle blown on them. We can help those in need of a voice against the IRS. If you or someone you know have had the whistle blown on them and need help; call Lothamer Tax Resolution today.